PANAMA CITY BEACH -- When Debra Tainsh's veteran husband died of illness traced back to Agent Orange, she expected to be able to survive on his military benefits.

But David Tainsh's death left his wife in a gray area, receiving just over half of what she expected through an insurance forfeiture commonly referred to as the "widows' tax." Through the offset, VA survivor payments are deducted from those paid by the Department of Defense instead of combined. For Tainsh, it means a monthly income of $2,000 instead of the expected $3,525.

"I should be getting $2,000 a month, which would have been 55 percent of my husband's retirement pay, from the Department of Defense," Tainsh said. "But I only get $475 a month from them because they take what the VA pays me, which is $1,525, and they subtract it. ... It's a matter of the Department of Defense is not being fair by any means to the widows of retired military personnel who die of service-connected issues."

David Tainsh, who died in December 2014, had retired in 1994 from the Marine Corps after almost 30 years of service. Tainsh said for those 20 years in retirement, her husband had paid into the military Survivor Benefit Plan. SBP, an elective insurance policy, is supposed to guarantee a service members' surviving spouse up to 55 percent of his retired pay upon his death.

However, a separate payment awarded by the Department of Veterans Affairs (VA) also kicks in when a service member's death is service-connected, as Tainsh's was. This payment, the Dependency and Indemnity Compensation (DIC), is paid automatically.

For most survivors, multiple annuities can be paid upon the service members' death. As such, Tainsh expected to receive 55 percent of her husband's pay -- $2,000 -- monthly through SBP and $1,525 monthly through DIC.

"But if your husband or wife ends up becoming disabled and dying of a service-connected issue, such as my husband did of stage 4 lung and brain cancer put back to Agent Orange, that comes out of the VA," said Tainsh, 63. And for military spouses -- and military spouses only -- the government requires that SBP be deducted from military DIC annuities, not combined.

"All those premiums that so many men and women have paid in to cover their spouses, we don't know where those premiums go," Tainsh said. "It's not back to us."

'Egregious and unfair theft'

Tainsh is not alone. Pentagon spokesman Dave Eastburn said the SPB/DIC offeset applies to about 10 percent of the more than 635,000 total survivors eligible under both programs.

A Facebook group called "SBP/DIC Offset" has almost 1,400 members, one of whom is Kathy Prout. Prout, who lives near San Diego, said she is "over a quarter of a million dollars in the hole from this offset" after dealing with the issue for over 20 years. Her late husband, James Prout, who was in the Navy for 29 years, died in 1995 in the line of duty.

The DoD "is not honoring the contract the deceased purchased," Prout said. "People are paying premiums for a benefit they may not get."

Kayce Lee, an Army widow living in Texas, also said it has been difficult to get by with the DoD not paying full benefits. Her husband, Dennis Lee, died during physical training while on active duty at Fort Hood in 2011.

"It has been very hard since my husband passed," Lee wrote in a letter. "We went from my husband making close to $4,000 a month, to no husband or daddy period."

She and her family now face a "$1,568 pension that will be cut down when my youngest son turns 18." Her youngest son is now 5. "The widows of federal civil service employees do not have this same offset, nor would your wife if you died while a Congressman."

Eastburn pointed out small differences between the annuities: SBP is for survivors of current military members and retirees, and it is paid regardless of the cause of death. DIC is only for survivors of veterans who die of service-connected causes.

"Both ... serve the same general purpose of providing a cost-of-living adjusted annuity to a survivor following the death of a member, but for two different populations," he said.

But Tainsh and others aren't convinced the two are mutually exclusive.

"The 'widow's tax' is clearly unfair and makes no sense," Rep. Neal Dunn said through a spokesperson.

Ted Painter, national legislative director for the American Military Retirees Association, called it "arguably the most egregious and unfair theft of military related benefits currently in existence."

"Shamefully," Painter said, "we are consistently met with the same answer from members of Congress -- a repeal is impossible to due to the cost. In reality, the cost is minimal and shouldn't exist in the first place."

Closing the gap

But legislators for years have tried to eliminate the offset. In 2008, Congress approved the Special Survivor Indemnity Allowance (SSIA), to help close the gap. SSIA, paid monthly, now pays surviving spouses $310 per month, about 25 percent of the offset. The allowance, for now, has been extended through May 2018.

Florida Sen. Bill Nelson said through a spokesman he has "introduced legislation to repeal this dollar-for-dollar offset in every Congress since 2001" and "most recently ... introduced S. 339, the Military Widow's Tax Elimination Act of 2017, to repeal the offset."

"Service members and their families paid into SBP and ought to receive the full benefit," Nelson said through his spokesman. "That is why I've introduced legislation to repeal the offset and will continue to fight for its passage so that these individuals receive what they are owed."

Dunn is a cosponsor of a similar bill in the House, HR 846, the Military Surviving Spouses Equity Act.

"Members of our military and their families make great sacrifices in their service to our country," Dunn said. "It is an appalling injustice to have a surviving spouse's retirement annuity -- which these families dutifully paid for -- canceled out or offset because their loved one's death was service-connected."